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KAI RYSSDAL: That rice price I mentioned is only one in a string of rising food staples. Today, the government of India decided it's had enough, and suspended futures trading for some key commodities there, including soybean oil, chickpeas and potatoes.
From the Marketplace Sustainability Desk, Sam Eaton reports.
SAM EATON: There's a stark divide between places like the United States and India when food prices rise. India's inflation recently surged 7.6 percent, the highest in three years, and for the millions of low wage earners, like this woman at a food market in New Delhi, that can mean the difference between eating and going without.
SHOPPER: Everything is expensive for me. I'm a poor person, so nothing is cheap. Lentils, ghee, vegetables, wheat, everything is out of my reach.
Today the Indian government responded to these concerns by essentially laying the blame on commodity markets. It imposed a four month ban on futures contracts for cooking oil and major food items. The idea is to cut out any speculators who may be driving up prices with bets on future supply shortages, but Harvard economist Ken Rogoff says the plan may backfire.
KEN ROGOFF: Having the futures markets helps lock in prices for farmers and helps smooth production. The last thing you want to do is try to close down the futures markets the way India does, but the government just feels desperate to find a scapegoat.
Last year India imposed a similar trading ban on rice and wheat, but prices continued to soar, and a recent government study found no evidence that speculators are responsible for driving up prices. Indian commodity trader Bitupan Majumdar says that should be proof enough that futures markets aren't to blame.
BITUPAN MAJUMDAR: If you ignore the markets it won't help you out.
Instead, he says, you take away the one tool that gives policymakers an idea of what's to come.
I'm Sam Eaton for Marketplace.